CII “Deeply Disappointed” by House Panel Approval of Investor-Unfriendly Bills
CII is “deeply disappointed that the House Financial Services Committee approved legislation that would undermine critical U.S. investor protections,” said CII Executive Director Ken Bertsch. HR 5311, approved June 16, would impose onerous requirements on proxy advisors that could weaken public company corporate governance and the fiduciary duty of proxy advisors to investor clients. In particular, Bertsch noted, “giving companies the right to review and seek changes in proxy advisor reports could chill the independence of proxy advisors and unduly delay their reports.” HR 5429, also approved June 16, would shackle the Securities and Exchange Commission (SEC) by requiring it to review thousands of rules on a regular basis. “While such reviews sound reasonable,” Bertsch said, “they would soak up resources the SEC needs to ensure fair, transparent and healthy financial markets, and paralyze the SEC’s rulemaking capacity.”
On June 13, CII sent letters to Financial Services Committee leaders opposing both bills. CII’s letter on the proxy advisor legislation was co-signed by 27 members, other investors and investor groups. CII detailed its concerns with both bills in written testimony submitted for a May 17 House subcommittee hearing.